Getting Prepared to Sell
Whatever the reason may be, once you’ve decided that it’s time to sell your condo, it’s important that you prepare for the costs of doing so. While the costs of selling a condo won’t typically be as high a buyer’s costs, you’ll still pay a variety of fees and charges.
Most of these are connected with the financing process your buyer will initiate with their mortgage (which you and your agent will be informed of ahead of closing — don’t worry), but there are additional costs that you might incur personally in getting the condo ready to sell. Let’s explore the costs of selling a condo step by step.
The Costs You Incur Personally in Selling
Some of the costs of selling a condo that you’ll experience early on are expenses for getting it ready to be listed. These might include any repairs you need to make, upgrades to make the home more in line with current trends, or staging the home for sale.
If you don’t need to make any repairs, or if the home is being photographed with your belongings and furniture in it still (rather than being staged), then that’s less cost you’ll incur. But not every condo is in tip-top shape for listing. You may also have moved prior to selling your current condo, in which case an agent might recommend having the home staged to give potential buyers an idea of what it would like fully furnished.
The Costs Associated with the Transaction
The financing process can be complex, particularly for buyers. Sellers have their own share of steps to navigate, too, and each comes with a cost. But being informed will help you be prepared when the times comes to pay. Below are categories of the costs of selling a condo.
- Commissions and fees. Commission structures vary between agents, but you can expect to pay 4 percent to 6 percent of the sale price, which may be split up between buyer and seller agents. Additionally, you’ll have a fee for an attorney to review your purchase and sales agreement and any other contracts or documents.
- Mortgage fees and taxes. When you sell a home, your current mortgage is paid off, and you receive the difference between that principal balance and the value, known as equity. Depending on your loan terms, there may be an early loan payoff fee or penalty along with prorated interest. You may also have to pay title transfer taxes, title insurance fees, prorated property taxes or association dues, and a home warranty premium if you’re offering one.
- Future costs. That might be a very broad term, but it’s still accurate. Just because you’ve paid the costs of selling your current condo doesn’t mean it’s over. You have to factor in what’s next. Technically, the money you’re paying here goes toward buying a new home. It’s not tied to selling your current condo. But they’re both connected in the big picture. You may even need the funds from selling your condo to use as a down payment on your next one. Again, these costs aren’t tied to the current sale, but they’re something to keep in mind.
And the Total Costs of Selling a Condo Are…
Roughly 8 percent to 10 percent of the sale price. As a seller, you’ll receive documentation detailing your overall costs, and they’ll be finalized on the Closing Disclosure for the transaction. Ideally, you want your costs to be less than that, but there will definitely be costs. Planning for the 8 percent to 10 percent will help you prepare for that final price tag when the time comes — and perhaps even leave you pleasantly surprised should it come in lower.
If you’re thinking about selling, talk to us first.